CDN NEWS | 
US NEWS 
Dec 12, 2018, by Lorcan Roche Kelly
(Bloomberg)
Not a Brexit vote
British Prime Minister Theresa May is facing a confidence vote in her leadership of her own party later today after rebels secured enough backers to force the issue. In a speech on Downing Street this morning, she promised to “contest the vote with everything I’ve got.” While investors think she will win, a narrow margin of victory would further weaken May’s grip on power. The latest political dramas will do nothing to assuage the worries of European leaders who are becoming increasingly frustrated with the chaos in London.
Hard ball
President Donald Trump was in a bellicose mood at yesterday’s meeting with Senate Democratic leader Chuck Schumer and House Democratic leader Nancy Pelosi, insisting that he would be happy to see a partial government shutdown if full funding for his border wall is not approved. Due to previous budget agreements for 2019, any closure after Dec. 21. would only shutter some departments and agencies.
Trade dealing
The trade talks between China and the U.S. took something of the air of a hostage negotiation when Trump said he would “intervene” in U.S. efforts to extradite Huawei Technologies Co. executive Meng Wanzhou if he felt it was necessary to help get a trade deal done. While Chinese officials welcomed the comments, they risk undermining other White House officials who have insisted the Huawei arrest is not connected to the broader dispute between the countries. That aside, there are high hopes of a lasting deal with China apparently open to cutting car tariffs, seen as a positive gesture towards unwinding the standoff.
Markets rise
Overnight, the MSCI Asia Pacific Index climbed 1.6 percent while Japan’s Topix index closed 2 percent higher in a rally that saw all industry groups advance on trade optimism. In Europe, the Stoxx 600 Index gained 1.0 percent by 5:45 a.m. Eastern Time. S&P 500 futures pointed to a jump at the open, the 10-year Treasury yield was at 2.892 percent and gold was higher.
Coming up…
Headline U.S. inflation is expected to show a drop back to 2.2 percent in November when the data is released at 8:30 a.m., while core inflation is likely to have risen to 2.2 percent. The oil market will keep an eye on the EIA U.S. oil inventory report at 10:30 a.m. while the U.S. Treasury sale of $24 billion of 10-year at 1:00 p.m. is unlikely to cause many waves after the recent drop in yields. The vote on Theresa May’s leadership of the Conservative Party is expected to be completed by 3:00 p.m.
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